🟣 ETH Supply Go Down - Blockworks Newsletter

ETH and BTC continue to hold $21k and $1550, remaining surprisingly strong after last week's large rally. Rumors of the launch of crvUSD, Curve’s upcoming stablecoin, caused a stir yesterday despite being essentially shot down by the Curve founder. This didn’t stop Curve-related protocol tokens, such as CTR (+120%), from seeing a pump. This isn’t the first time rumors of crvUSD have surfaced, and it certainly won’t be the last. I’ll believe it when I see the contract on Etherscan.

Yesterday, the number of Ethereum validators passed 500,000 for the first time. While the upcoming Shanghai upgrade scheduled for March will finally enable withdrawals from the beacon chain, I expect this number to continue to grow throughout the year, along with the use of LSDs.

For those that are wondering how withdrawals will work, I wrote a thread outlining all of the math the other day. I expect that the withdrawal period will be fairly high in the period just following Shanghai (70+ days) as many entities will be “recycling” their validators as they were locked into aspects with their staking they would like to change. For example, a lot of the early Lido validators were operated by a multi-sig as opposed to the current infrastructure and will need to be updated. Over time it will likely converge on a much smaller wait.

-Westie

ETH has once again become deflationary since the merge (for the third time)! And this is after only a few weeks of some activity coming back. Any long-term bullish cycle and this will certainly sustain, and at higher levels. Also, my favorite thing is taking a look at what the supply would have been if Ethereum were still using Proof-of-Work.

I feel like we keep harping on this fact, but it's still amazing to me that $1.7B in sell pressure has been taken off the market since the Merge. I’m sure this won’t be the last time we show you charts of the ETH supply.

One of the many cases of projects beginning to be more aware of protocol treasury management, Lido is proposing to move all of their idle DAI (22M) into the DAI Savings Rate contract until they need to use it. While they will only be earning a whipping $200,000 a year, this is just one of many safe treasury management strategies many protocols will likely deploy. And as the value of their treasury grows along with the staking rewards they accrue, there will be more opportunities to deploy into other strategies, likely using other DeFi protocols that will benefit as a result. This also shows the power of the DAI savings rate to attract DAI demand, which will only increase with more RWA backing.

2023 Theses - Part 2

Individual theses for 2023 by Blockworks Research analysts focused on networks and infrastructure.

2023 Theses - Part 1

Individual theses for 2023 by Blockworks Research analysts focused on the application layer.

CoinFLEX Defends Controversial ‘GTX’ Venture with 3AC Founders

What comes after ‘F’? Founders of bankrupt Three Arrows Capital have a new project they want money for, to enable trading of FTX claims

Latin America Growing Crypto Hotbed, Per Venture Launch’s Strategy

The emerging manager is said to see dollar signs in the region’s emerging and fast-growing digital economy

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.

133 W 19th St, New York, NY, 10011

Unsubscribe